Revolut, the British fintech firm, is facing another setback in its quest to become a fully licensed bank in the UK. The Bank of England has put the company’s full banking license on hold while raising concerns about the ability of startups to maintain effective risk management during swift international expansion.
According to reports, the central bank insists that Revolut must enhance its risk management infrastructure aligned with its growth before it grants the license. The Prudential Regulation Authority is also scrutinizing how fintech companies manage their operations both in the UK and abroad.
Even though Revolut got the green light to pursue this banking license over a year ago, it remains in what’s called the mobilization phase. This stage can span about 12 months, restricting deposits as the bank finalizes its establishment and as the authorities decide if it’s ready for full operation.
A full banking license is crucial for Revolut. It would enable the bank to lend in the UK and manage customer deposits exceeding £50,000. The company currently serves around 12 million customers in the country.
The delay coincides with Revolut’s broader ambitions; the company serves over 65 million customers globally and is actively seeking to expand its footprint beyond the UK. It already holds a banking license in the EU and operates in various countries including Australia, Japan, New Zealand, Singapore, Brazil, and the United States. Just last week, it launched operations in India and plans to establish itself in Colombia soon as well. Additionally, it has set its sights on Argentina and Mexico by 2026 and is eyeing entry into Africa, starting with South Africa. It’s also obtained a principal payments license in the UAE.
With an audacious goal of reaching 100 million customers by mid-2027 and entering over 30 new markets by 2030, Revolut is forging ahead. A spokesperson stated, “We are progressing in the last stages of mobilization and will continue our collaborative efforts with the PRA. This mobilization is unprecedented in the UK, given our global scale. A meticulous review is essential, and it’s more critical to get this right than to rush for deadlines.”
In its latest annual report, Revolut revealed a net profit of $1 billion (£790 million) for 2024, a remarkable increase in sales by 72%, totaling $4 billion (£3.1 billion). The company has also ventured into the cryptocurrency market with its own exchange.
